Just when Colleen Rhue thought she was out, Scranton is trying to pull her back in.

The downtown office worker recently moved to Moosic to escape the city's 3.4 percent wage tax on residents.

"Now it looks like the money I saved from moving, they want to take from me," Ms. Rhue said Tuesday, reacting to a possible 1 percent commuter tax included in the city's latest recovery plan proposal.

While the tax will be decided through the courts, support for the levy seems strong among city residents, who pay for police and fire protection and infrastructure. Support drops off at the city limits.

"I live here, and I stuck with the city," said Cindy Dermont, a Scranton resident and downtown office worker. "So I've been paying the city's property tax and income tax all along. Having commuters pay toward the city sounds good to me."

Michael Pagano, Ph.D., dean of the College of Urban Planning and Public Affairs at the University of Illinois, would say that Ms. Dermont has a right to want a commuter tax. Those who work in Scranton benefit from the services of the city - roads, infrastructure, common areas, sidewalks, police and fire - without paying for them. A commuter tax, he said, is a way to get the people who use services to support them rather than having city taxpayers subsidize the costs of commuters having jobs.

"The people who moved to the suburbs for lower taxes don't take into consideration that they are still using city services - because someone else has covered the cost of their having a job," he said. "Unless that changes, people will continue to make rational decisions that screw the city where they work and leave remaining city taxpayers with a growing burden."

The revised recovery plan must be reviewed and cleared by both the Pennsylvania Economy League and state Department of Community and Economic Development. Also because of the city's distinctive charter, other hurdles must be cleared.

Some businesses say they are prepared to help the city out but note that they have an obligation to do right by their employees.

Craig Best, chief executive officer of Penn Security Bank & Trust, is sympathetic to the city's plight. He's not opposed to a commuter tax in theory, but it depends upon how much the tax would be.

"As a bank headquartered in the city, we want to be as supportive as possible of the city," he said. "But we also have a responsibility to our employees and shareholders."

Greater Scranton Chamber of Commerce President Austin Burke said some city businesses have said the commuter tax would hurt their ability to attract employees, because working in the city would mean more money taken from their paychecks.

Other businesses are willing to assist the city and are amenable to a commuter tax. However, he said, they want to see a solution: a solid game plan that eliminates the city's structural deficit over time.

"No one wants be taxed or see their employees taxed unfairly," Mr. Burke said. "Everyone wants to see a long-term solution, not just a tax that plugs a hole."

The chamber doesn't have an official position on the recovery plan or the commuter tax yet. Chamber officials will review the entire, final plan with an eye toward whether it offers a long-term solution to the city's structural deficit.

The commuter tax has been embraced by city council as a way to relieve city property taxpayers of some the burden of financing the city. Commuters, along with nonprofit groups, have been eyed by city council as revenue sources.

Collection of the tax from some businesses, such as Cigna Healthcare and Bank of America, could be difficult. The Scranton/Moosic line bisects each property.

The commuter tax appeared in Mr. Doherty's revised recovery plan proposed in May. In that proposal, the city wanted to levy a 1 percent income tax on nonresident workers in the city with estimates that it would generate $3 million to $4 million annually.

The city had a 0.6 percent tax on nonresidents who worked in Scranton in part of 1993 and all of 1994, but it was dropped in 1995 in the face of public outcry, legal challenges that ultimately failed and even boycotts of city businesses.

In 1996, then-state Rep. Frank Serafini of Moosic pushed through legislation amending Act 47 to make reviving the commuter tax more difficult for Scranton. The amended law requires the city "has substantially implemented ... provisions of the (recovery) plan that call for increasing existing tax rates levied on residents and increasing fees charged by the municipality" and that "additional income from the aforementioned actions is insufficient to balance the municipal budget, necessitating additional revenue from an increase in the tax on nonresident income."

Nearly 75 percent of Scranton residents pay $500 or less in real estate taxes to the city. That does not include taxes to city schools.

Or to avoid the Serafini law, Scranton, a second-class A city, could attempt to become a third-class city, something city officials have previously said they were considering. The city could qualify as third class because population dipped below 80,000 in two consecutive censuses, 2000 and 2010.

Dr. Pagano said commuter taxes are becoming more common as regions seek to raise revenue and fairly distribute the cost of providing services. In Ohio, he said, every municipality has both a residential income tax and a commuter tax.

Contact the writer: dfalchek@timesshamrock.com

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